The NSW compulsory third-party (CTP) green slip insurance scheme is about to undergo a comprehensive review, according to the State Insurance Regulatory Authority (SIRA).
Minister for Innovation and Better Regulation Victor Dominello said the system, which is designed to protect drivers from legal liabilities if they seriously injure or kill other road users, is not currently fit for purpose.
CTP was introduced in NSW in 1999, but Mr Dominello argued the state’s scheme provides the least value for money in the country. He claimed premiums have surged 70 per cent in the last eight years alone.
“Over the past decade, only 45 cents in every premium dollar has been returned in benefits to injured road users, with the rest going towards scheme costs and providers,” he remarked.
“The scheme has become inefficient and unsustainable. The NSW government is committed to working in consultation with insurers, lawyers, medical professionals and other stakeholders to deliver a better scheme for NSW road users.”
SIRA’s announcement comes three months after Zurich informed the organisation that it would be withdrawing from the CTP market to focus on other products. The insurer’s decision would reduce the number of green slip providers in NSW to six.
The NSW government is focusing on four review goals and has published an options paper to generate discussion between key stakeholders. The objectives are:
A separate independent review from the NSW government was also released that analysed profits among CTP providers. The document offered advice to insurers on risk ratings, competition levels and premium prices.
Earlier this month, SIRA announced a new taskforce to tackle CTP fraud, with Mr Dominello arguing that false claims are a serious problem in the state. The government estimates that fraud adds approximately $75 to each green slip policy.
“The NSW government has identified an alarming rise in suspected fraudulent CTP claims. This is unfair and cheats all motorists who end up paying higher green slip prices,” he commented.
SIRA Chief Executive Anthony Lean will chair the taskforce, which will raise awareness of CTP fraud and provide recommendations to the government on how to handle false claims.
If you have been involved in a motor accident in NSW and suffered injuries as a result, please contact Gerard Malouf & Partners to discuss your eligibility for compensation.